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Providers find themselves in an increasingly tricky spot as competi-tive bidding, regulatory pressures, Medicare audits and other challenges force them to shape a business that can survive and succeed despite such a funding environment.

The key lies in metrics. Providers must track their performance to see where they can improve and where they can capitalize on what they’re doing right. The question is, what areas should they measure and against what metrics can they bench-mark their success?

That’s not an easy answer, because no two provider business are exactly alike. That said, there are some commonalities when it comes to how providers process claims, work with their referral partners, and shape their workflows. Once providers track specific elements of their operations, they will begin to find opportunities to streamline processes in such a way that small gains can have a big impact on the bottom line. Moreover, when providers track the care that they give their patients, they can define compli-ance and outcomes metrics that not only magnify therapeutic effective-ness, but differentiate their businesses to referral partners.

Read this month’s cover story to learn more about how measuring metrics can refine your business.

HME Care andBusiness Metrics . . . . . Page 18

Defining and Measuring Key Business and Care Metrics

November 2015Volume 22, Number 11

hme-business.com

What’s Inside:

Annual Mobility Outlook . . . . . . . . . 24

News, Trends & Analysis . . . . . . . . . . 8

Industry Newsmakers . . . . . . . . . . . . 15

Compression Certification . . . . . . . 17

Senior Products . . . . . . . . . . . . . . . . . 29

HME ‘Caretailing’ . . . . . . . . . . . . . . . 34

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4 HMEBusiness | November 2015 | hme-business.com Management Solutions | Technology | Products

HME Business November 2015Table of ContentsVolume 22 No. 11

6 Editor’s Note 15 People in HME

VGM’s Cole, Blue Chip’s Resnick

17 Problem Solver Compression Certification

29 Product Solutions Senior Patients

30 HME Inventory 33 Advertiser Index 33 Industry Events 34 Observation Deck

HME ‘Caretailing’

8HHS OIG: Medicaid should implement bidding; HME Business announces 2016 New Product Award winners; CMS releases rural zip codes for bid expansion; CMS holds off on miscel-laneous code changes; Some states see post-pay audits on parenteral nutrition, ventilators; New video offers tips on medical alert use; Round One re-compete bidding underway; WAMES awards Home Care Medical directors; Philips Launches OSA patient re-engagement campaign; Providers starting to get paid using ICD-10 Codes; New brand for reim-bursement services

18 Provider MetricsThere’s an old saying that, “what gets measured, gets managed,” and that has become doubly true for HME providers who must find every possible efficiency in order to reduce the pressure of public and private payor reim-bursement cuts. Experts examine the metrics against which providers can benchmark their business performance.

ID STATEMENTHME Business (ISSN 1940-6479) is published monthly by 1105 Media, Inc., 9201 Oakdale Avenue, Ste. 101, Chatsworth, CA 91311. Periodi-cals postage paid at Chatsworth, CA 91311-9998, and at additional mailing offices. Complimentary subscriptions are sent to qualifying subscribers. Annual subscription rates for non-qualified subscribers are: U.S. $77; Canada $147 (U.S. funds); International $187 (U.S. funds). Subscription inquiries, back issue requests, and address changes: Mail to: HME Business, P.O. Box 2166, Skokie, IL 60076-7866, email [email protected], or call (847) 763-9688. POSTMASTER: Send address changes to HME Business, P.O. Box 2166, Skokie, IL 60076-7866. Canada Publications Mail Agreement No: 40612608. Return Undeliverable Canadian Addresses to Circulation Dept. or XPO Returns: P.O. Box 201, Richmond Hill, ON L4B 4R5, Canada.

COPYRIGHT STATEMENT© Copyright 2015 by 1105 Media, Inc. All rights reserved. Printed in the U.S.A. Reproductions in whole or part prohibited except by written

permission. Mail requests to “Permissions Editor,” c/o HME Business, 14901 Quorum Dr, Ste. 425, Dallas, TX 75254.

LEGAL DISCLAIMERThe information in this magazine has not undergone any formal testing by 1105 Media, Inc. and is distributed without any warranty expressed or implied. Implementation or use of any information contained herein is the reader’s sole responsibility. While the information has been reviewed for accuracy, there is no guarantee that the same or similar results may be achieved in all environments. Technical inaccuracies may result from printing errors and/or new developments in the industry.

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24 Annual Mobility OutlookAs CMS prepares for the nationwide expansion of competi-tive bidding, mobility providers find themselves at the tip of the spear. In addition to taking massive reimbursement cuts, CMS is using the opportunity to go after complex rehab — again. How can providers protect their businesses, as well as beneficiary access to medical equipment?

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Don’t you hate it when someone slips something past you? As a parent of three girls, I encounter that a lot. Something will get broken, or a mess will get made, or a bad grade will come in on the report card, and invariably the strategy my kids will always opt for is to hope dad won’t notice.

I would have thought a career in journalism would have better prepared me. It doesn’t always happen, but there are times when you’re researching a story and someone will try to pull the wool over your eyes in hopes that you don’t discover an uncomfortable truth that they would prefer not be subject to public scrutiny. It’s rare, but it happens. So it’s natural for anyone doing this kind of work to develop at least a bit of an internal BS detector.

So of course, I thought I’d be able to use those “keen” senses to sniff out when my kids are trying to pull a fast one on dear old dad.

Nope. It turns out I’m just as easy to fool as any slow-witted father figure on a television sitcom. I’m pretty sure my kids could set the kitchen on fire and then handily distract me from the conflagration.

Pretty Sneaky, CMSSo, I wasn’t too surprised at my dull-wittedness when I realized that CMS slipped something right past me. I discovered my oversight while interviewing sources for HMEB’s annual mobility outlook (see “The Tip of the Spear,” page 24).

Specifically, I’m talking about CMS’s national expansion of competitive bidding as it relates to complex rehab technology. Under the expansion, CMS will apply its bid pricing scheme to CRT accessories (read more about CMS’s pricing methodology in “How National Expansion Will Work,” page 26).

To begin with, that’s a bit of a misnomer, because the word “accessory” almost implies the unnecessary; things that aren’t needed. Clearly, in the realm of CRT, that is not the case. CRT accessories are needed items that ensure a patient can properly use his or her chair and receive its intended therapeutic benefit. CRT accessories aren’t options; they’re vital to the use of the chair.

But let’s not get hung up in semantics. Let’s focus on what CMS is doing. Did you catch how CMS put one past me? I’m hoping other people didn’t notice, as well, so that I don’t feel like such a dope. It’s the fact that CMS is even applying its bid pricing scheme to complex rehab accessories. CMS shouldn’t be doing that.

Way back when Congress passed the Medicare

Improvements for Patients and Providers Act (MIPPA) in 2008, the main thing the law did was delay CMS from going through with Round One of competitive bidding. But it also did one other critical thing: it protected CRT from competitive bidding. CRT was carved out of the program.

Re-discovering that fact was a real “I could have had a V-8” moment for me. I’m pretty sure I audibly slapped my forehead when one of the story’s sources reminded me of that key fact.

And I have to admit that once the sting of my forehead slapping wore off, I was still left a little befuddled: How can CMS simply ignore a law? If CRT is supposed to be immune from competitive bidding, how can CMS apply bid pricing to CRT accessories?

I guess the answer comes down to the letter of the law vs. the spirit of the law. MIPPA doesn’t specifically list CRT accessories, as opposed to chairs, so apparently CMS doesn’t think the MIPPA carve out applies. Now, I might be your average, garden-variety dunderhead, but if you read MIPPA, I think it’s pretty clearly those accessories should fall under the carve out.

But CMS is pushing forward with its plan, and with just two months to go, the industry — and patients — can’t wait on a legal fight. That’s why supporting H.R. 3229, which protects CRT from the national expansion, is so important. Make sure you reach out to your Representative’s office and convince his or her staff that the lawmaker must support the bill as a co-sponsor. Moreover, at press time a Senate companion bill was in the works, so ensure you do the same for your Senators.

Thanks and FarewellLastly, I want to bid a happy retirement to Carolyn Cole, vice president of communications for VGM Group Inc., and Peggy Walker, billing & reimbursement advisor for VGM’s US Rehab Division. Both have been indispensable aids to HME Business magazine and their input and assistance has helped HMEB serve up content that I’m very proud of. I wish you both the best of luck and happy travels in your new adventures.

David KopfEditorHME Business

CMS’s CRT End Run

In the fight against competitive bidding expansion, a key detail pops up.

REACHING THE STAFFEditors can be reached via e-mail, fax, telephone, or mail. A list of editors and contact information is at www.hme-business.com.

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Volume 22 Number 11November 2015

Editor’s Note

Chief Executive Officer Rajeev Kapur Senior Vice President Richard Vitale & Chief Financial Officer Chief Operating Officer Henry Allain Executive Vice President Michael J. Valenti Vice President, Erik A. Lindgren Information Technology & Web Operations Executive Chairman Jeffrey S. Klein

Steve AckermanPresident

Spectrum Medical

Rob Baumhover Director of Retail Services

for VGM Retail Services

Ty Bello, RCCPresident and Founder

Team@Work

Georgie BlackburnVice President,

Government Relations and Legislative Affairs

BLACKBURN’S

Sandra CanallyPresident

The Compliance Team Inc.

Dave CormackPresident and CEO

Brightree LLC

John C EberhartPresident

Eberhart Home Health Inc.

Brian LaDukeVice President, Marketing

for North America Invacare Corp.

John Letizia President of Laurel

Medical Supplies Inc.

Joe Lewarski Vice President of Global Respiratory and Sleep

Drive Medical Design & Mfg.

Drew McCartney President and CEO of

Harmar

Ron ResnickPresident

Blue Chip Medical Products Inc.

Kelly J. Riley, CRT , RCP Practice Manager,

Allergy Clinic of Tulsa

Tom RyanPresident and CEO

American Association for Homecare

Wayne van HalemPresident and Founder

The van Halem Group LLC

EDITORIAL ADVISORY BOARD

Editor David Kopf (949) 265-1561 Group Publisher Karen Cavallo (760) 610-0800

Art Director Dudley Wakamatsu Director, Print David Seymour & Online Production Production Coordinator Charles Johnson

Director of Online Marlin Mowatt Product Development

SECURITY, SAFETY & HEALTH GROUP

President & Group Publisher Kevin O’Grady Group Publisher Karen Cavallo Group Circulation Director Margaret Perry Group Marketing Director Susan May Group Social Media Editor Ginger Hill

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More industry intelligence is available at hme-business.com.

Developing Stories — Monitor HME-Business.com regularly to stay on top of key industry stories unfolding in November, especially coverage of the industry’s efforts to protect the CRT benefit, and minimize the impact of the national expansion of competitive bidding.

Live Webinar — On Nov. 17, HME Business will host a special webinar on the legal side of retail sales, which will be presented by Jeff Baird, chairman of the Health Care Group at law firm Brown & Fortunato, P.C. More info at hme-busi-ness.com/webcasts/list/all-webinars.aspx.

Free On-Demand Webinar — HME Business recently hosted “Next Level Retail,” a free, McKesson-sponsored webinar on leverage the web to support provider retail sales efforts featuring Jim Greatorex of VGM Retail. To register for this free webinar, visit hme-business.com/webcasts/list/all-webinars.aspx.

On-Demand Webinar — Also available on demand is “Top 10 Audit Tips: How to Survive Audits and How to Win Them,” presented by Wayne van Halem, founder and president of audit consulting firm Van Halem Group. To access an archive of this webinar, visit hme-busi-ness.com/webcasts/list/all-webinars.aspx.

e-Source — Sign up for our weekly e-news-letter, e-Source, to ensure you stay up to

date on the latest industry news, trends and developments.

Follow and Friend us on Social media — You can find HMEB on Twitter at twitter.com/hmebusiness, and on Facebook at www.facebook.com/HMEBusiness. Keep track of us on both services to keep up on the latest headlines.

Voice Your Opinion — Have an opinion on how the industry is headed? Join the discussion between involved HME Business readers by posting your comments to any story on the site.

Provider Polls — Participate in our regular online polls, which are always visible in the right-hand margin of our site. n

HHS OIG Repeats Itself:Medicaid Should Implement Bidding

State Medicaid programs should implement competi-tive bidding programs, and apply Medicare competitive bidding rates to specific HME/DME items to save roughly $30.1 million, according to a recent report from the HHS Office of Inspector General.

In the report (available at 1.usa.gov/1LRuDfy), OIG audited California, Minnesota, New York, and Ohio to determine if their state Medicaid agen-cies could achieve savings for selected DME items. The Office compared each state’s Medicaid reimbursement rate for selected DME items with available Medicare rates to determine the amount of potential savings had the states used a competitive bidding program similar to Medicare’s.

The audit found that Medicaid provider reimbursement rates for those DME items varied significantly among the states, but that the states could lower provider reimbursement rates, resulting in approximately $30.1 million in potential cost savings. However, the OIG did not determine the cost for the states to implement a rebate or competitive bidding program.

Based on those findings, HHS OIG recommended that CMS do the following:• Seek legislative authority to limit State Medicaid DME reimbursement

rates to Medicare program rates.• Encourage further reduction of Medicaid reimbursement rates through

competitive bidding or manufacturer rebates.A CMS commentary from CMS Acting Administrator Andrew Slavitt

to Daniel Levinson, inspector generator of the HHS OIG, said that CMS concurred with both recommendations.

“States have the flexibility to administer their Medicaid programs in accordance with a CMS-approved State plan,” Slavitt wrote. “CMS commu-nicates frequently with States through the State plan process to inform them of all available options, including manufacturer rebates and competi-tive bidding procedures, for their DME purchasing programs.”

The report comes after a number of state-specific reports by HHS OIG suggesting various state Medicaid programs adopt competitive bidding and similar reimbursement cuts. Those reports have included California, Illinois, Indiana, Minnesota, New Jersey and Ohio. n

Office’s latest report recommends CMS apply Medicare bid pricing to Medicaid programs, and Medicaids implement their own bid programs.

See HME Business New Product Award Winners continued on page 10

HME Business Announces 2016 New Product Award WinnersDiverse range of offerings covers range of products and services including respiratory, mobility, retail, access and others.

“And the envelope, please.” HME Business magazine has unveiled the winners of its 2015 New Product Awards competition.

In its second year, the HME Business New Product Award of the Year honors outstanding product development achievements by HME manufac-turer and service providers. Thirteen winning products were selected in the second year of this program.

Heard on the Web■n “Any ‘further reduction of Medicaid reimbursements rates’ will equal a reduction of Medicaid providers. Then HHS OIG studies won’t be necessary and that will save a bundle of money, too …”

■n “I’m surprised Congress doesn’t just apply that to all Federal spending and balance the budget over night. Seriously though, someone needs to educate them about the true costs of running a business that has to meet all of the Medicare and Medicaid documentation requirements, including audits and appeals.”

Join the news discussion on hme-business.com’s story comments.

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HME Business New Product Award Winners

continued from page 8

The winners are:• Auto Access

BraunAbility MXV• Beds & Support Surfaces

ROHO, A Permobil Group Company – ROHO Sensor Ready Cushion with Smart Check• Business Services

ARI Network Services, ARI Premium Directory Management

• Business Technology Brightree MyForms

• Diabetic Supply ARKRAY GLUCOCARD Shine Blood Glucose Monitoring System

• Home Access MHI Safe-er-Grip Brush Bar

• Mobility – Scooters (tie) HeartWay USA (PF7S) Royale4S Luxury Scooter Pride Mobility Products Corp. Go-Go Folding Scooter

• Mobility – Wheelchairs Quantum Rehab Q6 Edge 2.0 Power Chair with iLevel

• Respiratory – In-Home Equipment Inova Labs Activox DUO2

• Respiratory – Portable Equipment Philips Respironics SimplyGo Mini Portable Oxygen Concentrator

• Retail (tie) Dr. Comfort Rejuva Roscoe Medical – The Viverity Pain Relief Pad

Winners received awards and were recognized at the 2015 Medtrade Fall Expo in Atlanta October 27-29. They will also be highlighted in the December 2015 issue of HME Business magazine.

The entries demonstrate that the industry’s vendors are giving providers the tools they need to survive and thrive despite a difficult reimbursement and regulatory environment. n

See Bid Expansion Zip Codes continued on page 12

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MADE IN THE CMS Releases Rural Zip Codes for Bid ExpansionSixty-four percent of the areas outside of Round One and Two CBAs will be classified as rural.

The Centers for Medicare and Medicaid Services released the zip codes for the non-bid areas that will be impacted by the national expansion of competi-tive bidding, which goes into effect Jan. 1, 2016.

How the zip codes are classified has been a closely watched factor in the expansion, as the zip codes that are classified as “rural” will receive better reimbursement.

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Bid Expansion Zip Codes continued from page 10Of the 43,000 zip codes designated by the U.S. Postal Service, Round

One comprises 3,714 of those codes (8.6 percent of the total), and Round Two covers 13,902 of them (32.3 percent), according to analysis from the American Association for Homecare. The remaining zip codes impacted by the bid expansion are broken into two groups:

Regional zip codes, which cover 9,099 codes (20.9 percent of the total). These regional zip codes are subjected to new rates based on competitive bidding reimbursement.

Rural zip codes, which cover 16,285 zip codes (37.8 percent of the total. These areas will receive the rates based on bidding, but will receive a 10 percent increase.

“While CMS’ plan to expand the reach of the bidding program remains problematic, the fact that 64 percent of the areas outside of CBAs that will now be subject to bidding program-derived prices will be classified as ‘rural’ is positive news; this figure is higher than we had expected,” a state-ment from the association read.

CMS’s Rate Phase-InFor HME items affected by the expansion, the final rule phases in a new reimbursement rates for non-CBAs over 6 months beginning January 1, 2016. CMS divided up the continuous 48 states into eight distinct regions.

CMS will phase in the rate cuts that will be ushered in by the bid program expansion over course of 2016. As part of the program, CMS divided up the 48 contiguous states into eight regions. An un-weighted average of all of the single payment amounts (SPAs) from the CBAs in each of the eight will be used to determine a regional single payment amount (RSPA) for each covered item, according to AAHomecare.

From Jan. 1, 2016 to June 30, 2016, reimbursement for affected product categories will be based on 50 of the current, un-adjusted fee schedule, plus 50 percent of the RSPAs. Then, on July 1, 2016, the rates will drop to fully implement the bidding-derived rates, HME billing firm MiraVista LLC reports.

Download the Zip CodesFor providers interested in examining the zip codes themselves, the preliminary zip codes are part of a collection of files compressed in a .ZIP file that is available for download from CMS at go.cms.gov/1P2fazI. Once decompressed, the excel file containing the zip codes is named, “DMERuralZIP.xlsx” (companion .TXT and .CSV files accompany the Excel file). The remaining documents in the .ZIP archive are predominantly blank fee schedules.

CMS Holds Off on Miscellaneous HCPCS Code ChangesProposed elimination of K0108 and E1399, other changes will not be implemented on Jan. 1, 2016.

After proposing in June that it was considering removing two HCPCS codes and replacing them with six other codes by January, CMS is now backing off of that idea and says it would not eliminate the codes after all.

CMS originally said it would discontinue the K0108 and E1399 HCPCS codes for miscellaneous DME and miscellaneous wheelchair components and accessories, respectively. The codes would have been supplanted by six codes covering repair parts and accessories that were all based on price. CMS would purchase outright repair parts for items in codes that cost under $150, and would pay for items in codes costing over $150 on a capped rental basis.

This price-based approach to coding was problematic for a number of reasons, and various HME organizations submitted comments to CMS asking that it retain the original codes.

“Among other failures, the proposed coding change would have created an inappropriate lumping of

For example, based on that model, a provider in the Mideast region could expect to see an oxygen concentrator (E1390) that currently has a $178.23 reimbursement rate, go down to $134.21 on Jan. 1, 2016 (a 25 percent decrease), and then go down to $90.18 on July 1, 2016 (a 49 percent decrease), according to AAHomecare.

“The RSPAs are still bound to a national average that cannot vary more than 10 percent above or below the combined, un-weighted average of all RSPAs in the country,” AAHomecare reports. “As such, any area with a RSPA that is greater than 110 percent of the national average will be adjusted down-ward. Even the most remote, rural areas like Montana and North Dakota will be bound to the national ceiling even though costs may far exceed that of the high-population CBAs from which the prices were derived.”

Coming Out SwingingMeanwhile, the industry and lawmakers are preparing legislation that would reform the expansion by improving reimbursement rates, as well as other tweaks, and advocacy efforts calling to protect providers and patients from the expansion are already underway.

Rep. Tom Price (R-Ga.) is working to launch legislation that would decrease the expansion’s negative impact. Specifically, the legislation calls for:• Establishing a single-payment-amount-plus-30 percent adjustment to

help rural providers survive cuts that they could not replace with addi-tional volume, due to the geographic limitations of their markets.

• Providing a four-year phase-in for the national price adjustments.• Reinstating an unadjusted fee schedule as bid cap, instead of CMS

proposal for cap at previous bid rates.• Providing for a demonstration project for a market pricing program (MPP)

approach, similar to the approach Rep. Price outlined in H.R. 1717 in the 113th Congress.In the upper chamber, Dr. Price has reportedly been working with Sen.

John Thune (R-S.D.) to create companion legislation.On the grassroots level, AAHomecare called on providers to send letters

to their Congress members via the website PowerofHomecare.com, which has generated 3,800 letters to Congress in two months. The association said the industry needed to “beat that number” if it wanted to stave off the national expansion and urged providers to share the website with their contacts.

“An email or a call to a Congressional office may seem like a drop in the bucket, but as we work towards the introduction of this new legislation, we need Congressional offices to be hearing from their constituents on this issue,” a statement from the association read. “Numbers matter. These calls and emails educate policymakers, apply pressure, and swing key legislators to our side.”■n

dissimilar items without design, technical, or clinical commonalities into arbitrary payment group-ings,” a statement from the American Association for Homecare read. “CMS’s proposal went far beyond a simple coding change and would have been inconsistent with the Social Security Act requirement to keep coding, coverage, and pricing determinations separate. Such an act would have been a radically different termination of coding rules in place for nearly 25 years.”■n

Some States See Post-Pay Audits on Parenteral Nutrition, VentilatorsWith high denial rates in Jurisdiction A, it is likely the audits on those types of claims will expand.

Jurisdiction A’s recovery audit contractor (RAC), Performant Recovery, is conducting post-pay claims audits on parenteral nutrition and ventilators, according to the American Association for Homecare.

The affected states include Connecticut, Delaware, Massachusetts, Maryland, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont, as well as District of Columbia.

1115hme_News814.indd 12 10/21/15 3:40 PM

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“The review for both items will be complex, which means the RAC will be asking for medical records on randomly selected claims,” a statement from the association reads. “Any claims that have a ‘claim paid date’ over three years prior to the ADR date are not subject to this review.”

Where ventilators are concerned, the RAC’s website stated the audit risk arose because, “potential incorrect billing occurred when claims for ventilators were billed without an indication supporting the coverage and/or medical necessity guidelines outlined in the Medicare National Coverage Determinations Manual (NCD), §280.1, and the ‘Correct Coding and Coverage of Ventilators’ Joint DME MAC Publication, including when ventilator codes are incorrectly billed for CPAP- or bi-level PAP-only use.”

It is likely that the audits will spread to other states, according to Wayne van Halem, president of audit consulting firm The van Halem Group, a division of VGM Group Inc.

“I think with the results being published in Jurisdiction A showing a 91 percent denial rate, we can expect this to expand — especially when the national RAC begins their work,” he said. “Since they are paid on a contingency and these products have such a high reimbursement, there’s quite an incentive there.”

Providers impacted by the audits must educate themselves on the proper patients that should be receiving ventilation, van Halem said.

“The product categorization limits coverage for only the most severe patients,” he explained. “It all rests on a clear discussion in the medical record that, one, the underlying condition and, two, whatever evidence is appropriate for the condition to show that without ventilator support the patient is a real risk of death.”■n

New Video Offers Tips on Medical Alert Usage Consumer Affairs product says children of seniors can help foster adoption of devices.

Providers can watch the video and share it with their clients at bit.ly/CAalertvideo.

ConsumerAffairs.com, a Consumers Unified, LLC property, has released a video encouraging younger family members to help senior parents living at home use medical alert devices. The video could be a useful tool to providers offering such devices and related services.

Citing AARP statistics that nearly 90 percent of seniors want to stay in their own homes as they age, a statement from ConsumerAffairs.com said medical alert devices can help seniors retain that independence.

However, the group highlighted the fact that it can be difficult for younger people to talk to elderly relatives about wearing such a device. The video is designed to ease that conversation.

In order to facilitate those conversations, ConsumerAffairs.com reported it went through thousands of reviews to find helpful stories of children helping their elderly parents overcome a reluctance to wear a medical alert device.

Here’s a snapshot:• Medical alert devices give the elderly and their children peace of mind.• Elderly parents are more likely to agree to using medical alert devices if their children

make all the arrangements.• Testimonials show that seniors who overcome initial reluctance appreciate the indepen-

dence having a medical alert device gives them.■n

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Bidding for 2017 Round One Re-Compete UnderwayCMS provides further details on key steps providers should follow to ensure they successfully bid for 2017 contracts.

CMS has began the bidding for the re-compete of Round One of competitive bidding for 2017 starting on Oct. 15 and will end bidding on Dec. 16.

Providing further details in this week’s MLN Connects (go.cms.gov/1Psdq2X), CMS advised that providers should follow three key steps:• They should review and update their enrollment records (bit.ly/1NjG1V0), ensuring to

validate contact information and that they are properly licensed and accredited• They should register for the DMEPOS Bidding System (bit.ly/1RQTfdx) in the CMS

Enterprise Identity Management (EIDM) system.• They should prepare hard copies of their financial documents (bit.ly/1Ljo0FK).

CMS encouraged providers to refer to the Competitive Bidding Implementation Contractor’s website dmecompetitivebid.com to access Request for Bids instructions; bid preparation worksheets; the DBidS checklist and user guide; and various fact sheets, as well as to register to receive email updates

Providers with questions about the re-compete should call CBIC customer service at (877) 577-5331 between 9 a.m. and 7 p.m. Eastern Time, Monday through Friday. CBIC will extend those hours to 9 p.m. during the last two weeks of the registration and bidding windows, which close Nov. 20 and Dec. 16, respectively.

Important dates for Round One 2017:• Oct. 19 — CMS “strongly” encourages Backup Authorized Officials to register no later

than this date.• Nov. 16 — Covered document review date for bidders to submit financial documents.• Nov. 20 — Registration closes.• Dec. 16 — Bid window closes.• Winter 2016 — Preliminary bid evaluation notification.• Summer 2016 — CMS announces single payment amounts, and begins contracting

process.• Fall 2016 — CMS announces contract suppliers, begins contract supplier education and

begins beneficiary, referral agent and supplier education.• Jan. 1, 2017 — CMS implements contracts and prices for the Round One 2017

Re-Compete.■n

WAMES Awards Home Care Medical DirectorsDonna Smith and Jim Spellman honored for their efforts on behalf of the Wisconsin association and the industry.

The Wisconsin Association of Medical Equipment Services (WAMES) recently recog-nized two directors from New Berlin, Wis.-headquartered Home Care Medical Inc., a provider of rehab technology, respiratory care, and home medical equipment.

At the association’s 2015 Annual Convention in Wisconsin Dells, Wis., WAMES presented the following awards:• Jim Spellman, director of operations for Home Care Medical and 2015 WAMES President,

received the Industry Excellence award as well as the Distinguished Service award for his efforts on the WAMES Legislative Committee.

• Donna Smith, director of respiratory care for Home Care Medical, received the Outstanding Contribution award for her efforts on the WAMES Respiratory Committee.“WAMES provides leadership, strength and unity to the home medical equipment industry in

Wisconsin,” said John Teevan, president and CEO of Home Care Medical. “From lobbying in Madison for oxygen issues to providing support on the WAMES board, Jim and Donna’s contributions represent our continued commitment to excellence.”

Serving Southeastern Wisconsin via four locations since 1974, Home Care Medical received the

WAMES HME Provider of the Year award in 2014, 2013 and 2012. n

Philips Launches OSA Patient Re-engagement CampaignThe effort directs patients that have dropped off from therapy to their local HME providers.

Sleep and respiratory equipment maker Philips Respironics has rolled out a campaign aimed at re-engaging obstructive sleep apnea (OSA) patients who have struggled with or given up on sleep therapy.

As of 2014, an estimated eight million people who had been diagnosed with OSA were not engaged with therapy, according to data fusion analysis using data from the Centers for Disease Control, Health Market Science, Acxiom and Forrester.

To entice those patients back into treating their sleep apnea, the campaign educates them on the company’s Wisp sleep mask, and then directs them to their HME providers to obtain the mask. This Wisp is designed to blend stability and seal with minimal contact and increase comfort in order to fit 98 percent of sleep patients, according to the company.

The campaign will include a mix of search and banner ads driving patients to the Wisp web page on SleepApnea.com, which provides a phone number and email contact information for the Philips Respironics customer service team. If a patient is interested in obtaining the Wisp mask, the Philips Respironics customer service team will direct the patient to their established provider. In the event that a diagnosed OSA patient does not have a HME provider, they will be directed to HMEs who are in-network for the patient’s insurance.■n

Providers Starting to Get Paid Using ICD-10 CodesCMS is returning paid ERAs to TeamDME! users shortly after Oct. 1 implementation of new coding system.

Providers that took the plunge and prepared for ICD-10 are seeing their hard work pay off. HME software company TeamDME! is reporting that the Centers for Medicare/Medicaid Service (CMS) has begun returning paid ERAs for claims submitted by its users with ICD-10 diagnosis codes for claims with dates-of-service on or after Oct 1.

CMS set an Oct. 1 deadline for switching to the International Classification of Diseases 10th Revision (ICD-10). The ICD-10 transfer represents a massive expansion in the codes used to classify disease states. The new revision moves from ICD-9’s 3,824 procedure codes and 14,025 diagnosis codes to a considerably more detailed 71,924 procedure codes and 69,823 diagnosis codes.

A statement from TeamDME! said it eased the transition seamless by educating HME providers using its system on the conversion via newsletters and online webinars, as well as providing tools to assist clients with the transition. The change was “almost too easy,” Leigh McNellis of Spokane, Wash. Provider Peaks and Plains Medical Inc■n

New Brand for Reimbursement ServicesMediware changes name of long standing billing and collections service, but not the services.

HME software company Mediware Information Systems Inc. has changed the name of its Advantage Reimbursement business unit to Mediware Reimbursement Services.

The unit has provided billing and collections services to providers in the home infusion and durable medical equipment industries for more than 20 years, and now, under the Mediware banner, customers can easily access billing and collection services as well as Mediware’s complete line of home infusion software, including its industry-leading CPR+ and CareTend applications, which also serve HME/DME and home infusion providers.

“We are excited about the change in our name because Mediware customers will now know that we are part of the team,” said Jeanne Lugli, general manager of Advantage Reimbursement. “And our dedication to providing the best possible services will not change.”

Rob Weber, executive vice president of Mediware, added that Mediware was pleased to include Advantage Reimbursement under the corporate banner.

“It’s a great way for us to ensure that our customers are aware of and can readily access the full breadth of software and services available within our portfolio,” he said.■n

Donna Smith (L) and Jim Spellman (R) were awarded by the Wisconsin Association of Medical Equipment Services for their efforts on behalf of the industry and the association.

1115hme_News814.indd 14 10/21/15 3:40 PM


For Blue Chip Medical Products’ president and owner Ron Resnick, providing and creating durable medical equip-ment has been his life’s work and passion practically since he first entered the job market.

A high school athlete, Resnick got a scholarship to college for wrestling, and did his undergraduate degree at the University of Hartford. He graduated college, started working in retail and was offered a job at a provider called Kagle Surgical. At the time Harvey Diamond, who would eventually start Drive Medical, was the purchasing manager.

“There was no training back then,” Resnick recalls. “It was on-the-job training, and I decided I was going to be an expert in something, and it started in electro-therapy.”

So Resnick started specializing in selling TENS units, which at the time were the size of clock radios. He also specialized in biofeedback and EMG for muscle reeducation, as a means to get in the rehab business. Intrigued by that niche, Resnick began taking classes from makers of rehab equipment, and his hunger for knowledge prompted him to dig deeper.

“I started taking medical classes at Columbia University in New York,” he says. “They allowed me to sit in and learn, so I would sit there at night and learn about cerebral palsy, and neurological disorders, and started to become very proficient, and I spent my time doing pediatric rehabilitation products back then

“… I was like an ATP before ATPs were out,” he continues. “And I was very fortunate because I got to work with some very specialized therapists who knew about wheelchairs, and we started to develop a lot of wheelchairs for pediatrics.”

From there, Resnick and his peers developed a power reclining chair for patients with spinal chord injuries, and started developing various custom solutions for patients. By the late 1970s, this included custom inserts and accessories made out of durable, cleanable plastics.

Resnick — along with Diamond — then took the knowledge and skills he developed and joined Endicott Rental and Sales, a small, family-run provider, where he says they “started to dominate the rehab market significantly” by offering at-the-time unique items such as sip-and-puff chairs, power recliners, and specialized pediatric solutions.

“We were putting out product that nobody had,” he says. “… Manufacturers started to gravitate to us. … We were probably the largest, single-location rehab provider in the country.”

The company sold to Abbey Medical, which was a divi-sion of American Hospital Supply at the time, and then went onto to become Apria. Resnick stayed on board where he helped expand sales.

Resnick’s transition to manufacturing came when he made the move to a DME maker that was quickly picked up by Graham Field. He then went to Mason Medical as a sales manager, where he specialized in rehab products, specialized wheelchair cushions and mattresses. His friend Diamond, who had since become president and COO of Graham Field, invited Resnick back as vice president, where Resnick stayed for a while, but then eventually founded Blue Chip Medical Products.

And perhaps the company’s name, coined by Resnick’s son, sums up Resnick’s founding mission: providing top-tier, blue chip-quality medical products.

“When I first started out, I had a reputation in the mattress business,” he said. “When it came to product, I always felt that my product knowledge and direction and education helped the dealer and provider make better choices. So when I set up Blue Chip, I wanted to be the Nordstrom of healthcare. I wanted to put out a better product with features that were usable; not marketable nonsense, but real features based on the expertise that I developed over the 18 years prior to doing Blue Chip.”

People in HMEIndustry Newsmaker

A Life in Specialized HMEBlue Chip Medical’s Ron Resnick describes his life-long quest to provide custom,

quality care to patients.

VGM Mourns Loss of MillerMember service organization’s founder and chief executive suffers apparent fatal heart attack.VGM Group Inc. founder and CEO Van G. Miller died Sunday, Oct. 18, at his home, apparently as the result of a heart attack.

Miller founded the VGM Group Inc. in 1986 with a focus on helping community-based, independent HME providers drive quality home healthcare.

Miller passed the day after the youngest of his three sons, Christopher, was wed. In addition to Christopher, Miller also leaves behind sons Vance and Dax, and five grandchildren, as well as Chris Livingston, his significant other of 24 years.

At 67, he had been a key figure in the HME industry, and received numerous awards for business achievement. He was also a philanthropist who focused his giving on local agencies and projects.

VGM named Jim Walsh as chairman of the board, and he will also serve as interim CEO until the full board of directors has the chance to meet in person next month. Jim has been a long-time business partner of Miller and most recently was both president and general counsel of VGM Group Inc.

Focused, Employee-Driven ManagementMiller founded VGM and Associates on Sept. 3, 1986; with a focus on community-based, independent HME providers serving as the main drivers of quality home health care. The original buying group for independent home medical equipment providers grew to be member service organization offering a diverse company of business units. VGM is known for its wide range of services that include group purchasing, insurance, education, marketing, insurance contracting, advocacy and analysis.

To that point, Blue Chip still offers one its signature prod-ucts, the Supreme Air, and Resnick says his company just serviced an original unit from 18 years ago. When offered a new replacement, the family that owned it refused saying they wanted to keep the unit because it was so reliable.

“DME, to me, is durable medical equipment,” Resnick says.

Resnick says he’s proud of the company, facility and team that Blue Chip has developed, and the fact that the company continues to manufacture the majority of its products in the United States.

“My best assets are the people who work here,” he explains. “Blue Chip is going to be 21 years old, and the people that have been with me since I started this are still with me.”

The key for Blue Chip, Resnick says, is to help providers know that custom, therapeutic options are not only avail-able, but still profitable. The company now offers pressure mapping products, offers CEU courses on pressure mapping, and will even help providers conduct pressure mapping studies.

“It’s all about education,” he says. “We want to help the dealer make a better choice. Even in a competitive environ-ment with price, you don’t have to buy the least expensive, non-effective product. I’m never going to be the cheapest guy on the street — I don’t want to be — but you will get a very high-quality, cost-effective, clinically effective product.” n

Miller founded the VGM Group Inc. in 1986 with a focus on helping commu-nity-based, independent HME providers drive quality home healthcare.

Continues Next Page

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HMEB often profiles various industry newsmakers, but it’s a rare opportunity to profile someone who truly makes the industry’s news. Outgoing vice president of communications for VGM Group Inc. Carolyn Cole is one of those individuals.

Cole’s love affair with words started at a young age, and it eventually set her on a course that saw her become a key player within the HME industry’s largest member service organization. Starting at first grade, Cole was writing and illustrating short stories, and her parents — sensing her nascent knack for words — sent her to summer programs, such as typing lessons in fifth grade, early on to foster this literary creativity.

“Between my piano lessons, which started in first grade, and typing, I’ve been pounding a keyboard for about 53 years,” she recalls.

So it was natural that Cole would go on to major in a news-editorial journalism at Drake University. She interned at Waterloo, Iowa’s Waterloo Courier in the summer of 1973 where she was offered a job. She met her husband, Kevin Evans, sharing computer terminals at the paper, and continued working at the paper for 20 years.

“Then I kept hearing about this very interesting company and gentleman in town named Van Miller, and I finally go enough courage to ask him to lunch and ask him for a job,” she says.

As timing would have it, VGM Group had an opening for a public relations director, and thus began what Cole describes as a “wonderful, 19-year ride.”

That said, the trip wasn’t without some potholes along the way. One notable recollection has was CMS’s competitive bidding demonstration in Polk County, Fla.

“Everybody said, ‘It will never work, it will never work, it will never work,’” she says. “And by God somebody was right — it’s not working.

“The overwhelming regulation and reimbursement cuts have been just devastating,” she says. “And they’ve been non-stop. CMS has been singing from the same page in the hymn book for all these years.”

But despite such a difficult funding environment, Cole says that she never ceases to be “amazed by the commitment of the independent providers to taking care of the patients.”

“When Katrina stuck, I went on an Odyssey with Mark Higley and Ron Rogers, who both are still with VGM,” she

recollects. “We drove down, got all the way to the coast, talking to our providers along the way who had down amazingly heroic things — as independent providers do every time there is a natural disaster. … That was a defining moment for me. That changed my life in a very positive way.”

As much as Cole has had a love affair with words and with VGM, she’s comfortable to be approaching retirement. She knows the show will go on.

“When I left the Courier after 23 years, I was amazed to discover that when I left on a Friday that the Sunday paper still came out without me,” she jokes. “Life goes on, and there are some wonderful, younger people willing to step up, and who will step up, and who are.”

Also retiring from the Waterloo City Council, where she sat as an elected council member for 12 years, Cole will continue working on special projects for VGM from home for the next year. The biggest of those projects: a yearbook celebrating the companies 30th anniversary, which will feature close to 900 employee pictures — proof that there is no retirement from working with words.

And that’s fine with Cole, who proudly jests, “I don’t have any ink on my body, but I have ink in my veins!” n

People in HMEIndustry Newsmaker

Closing One Chapter to Open AnotherVGM communications VP Carolyn Cole looks back on a long career helping shape industry news.

VGM also has a significant business presence in management of post-acute health-care, golf, restaurants, orthotics and prosthetics and physical therapy. VGM employs 850 people, the majority of whom work at its headquarters in Waterloo, Iowa, but with significant offices in Dade City, Florida, Atlanta, Kansas City, Phoenix and Toronto.

Known for his easy-going personality, Miller still made phone calls to his 850-plus associates on their birthdays and work anniversaries, delivered caramel apples to everyone at Halloween and was a prominent figure in the booth at VGM’s trade shows. Despite his success, he considered himself to be “one of the associates” and practiced an open door policy in the office.

“I try to stay out of everybody’s way,” Miller recently said. “I look for opportunities for growth, and help make sure communication is company-wide. My ultimate responsibility is to make a decision when there is no clear-cut consensus. The most important thing I do is make sure that the values and camaraderie with our associates stay intact — like they were in the beginning.”

Life Before VGMMiller was born on July 23, 1948, to Blaine and Verda Bricker Miller. His parents were well-known Orange Township farmers. His first job was selling Watkins products to farm wives out of the trunk of his Ford Mustang, and later he sold pre-need cemetery lots and markets and combine insurance. He also did a tour of duty as an U.S. Army medic in Germany.

Miller has been described as having a vision that often exceeded that of his bosses, and he was known to highlight the fact that he’d been fired three times before starting VGM. Miller twice headed companies that made Inc. Magazine’s list of the 500 fastest growing U.S. companies, was recognized by the American Association for Homecare as a Champion of Homecare.

In 2009, Miller was inducted into the Junior Achievement of Eastern Iowa Hall of Fame. In 2014, he was named one of the Upper Midwest EY (Ernst and Young) Entrepreneurs of the Year. This year, the Des Moines Register named VGM the Top Workplace in Iowa among large companies.

In recent years Miller had set in place accommodations for his succession. In 2008, Miller and minority shareholders James E. Walsh Jr., and John Deery Jr., sold 100 percent of the stock of the company to its employees through an employee stock option plan (ESOP). The board of directors will meet today to affirm succession plans.

“Van thought of those who work for the company first, and his community second. His consummate skill in managing talent and making hard decisions was evident to all who know him,” Walsh said. “He frequently acknowledged that his associates are the ones who built the enterprise and that they should benefit from its success through the ESOP.” n

AAHomecare Adds FriedlanderExperienced non-profit pro brings marketing and communications skills to association.The American Association for Homecare has added Megan Friedlander as its new communications associate.

In the role, Friedlander will work closely with the communications team to inform AAHomecare members about the latest industry news and initiatives from Washington.

Friedlander comes to the association with a background in marketing and communications for non-profits. Her last position was in managing communications and marketing for the Council for Interior Design Qualification.

A native of Lenexa, Kan., Megan received her undergraduate degree in Theatre Management from Stephens College. n

U.S. Rehab Welcomes New VPRon Turzy joins group as vice presi-dent of complex rehab.U.S. Rehab has added Ron Turzy as its new vice president of complex rehab.

In this role, Turzy will work with the U.S. Rehab outcomes program and seek national complex rehab insurance contracts. He previously worked with Homelink and U.S. Rehab.

“His background as a provider, at a national complex rehab provider, and in Homelink provides the necessary knowledge base for U.S. Rehab to accomplish our future goals,” said U.S. Rehab President Greg Packer.

Turzy was formerly employed by Numotion, a complex rehab technology supplier providing services in 42 states, where he was an area contracting manager. He also was director of contracting and marketing for RehabTECH Inc., and has more than 13 years in contracting, sales, marketing and upper management experience in the field of complex rehab technology and DME.

Turzy also worked for American Hospital Supply Corp., Baxter Healthcare and Olsten in building business units. He has two degrees from Eastern Illinois University. n

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Today’s providers are on a constant quest for ways to drive new revenue, and compression represents a key opportunity to do so. Compression can be used to treat a variety of conditions, including foot swelling, wounds, mild edema, varicose veins, thrombosis, varicosities of varying severities, and diabetes. These various ailments represent an equally wide variety of patients that need those compression solutions.

And because compression is typically sold on a retail basis, this means the new revenue providers can yield from compression products and services will be free from costly Medicare-related complications such as documentation and audits. Given the large number of diabetic patients, seniors and other major patient populations that need compression, the volume of transactions can grow very large. Enterprising providers that specialize in compression can quickly find themselves deriving as much as a quarter of their revenues from compression garments alone.

“Bringing in compression garments offer a great way to bring in some additional cash sales for your business,” says Melissa Gwozdz, market analyst and communications manager for compression garment maker SIGVARIS Inc. “According the American College of Phlebology, more than 80 million Americans suffer from venous disorders. Symptoms include achy legs, varicose veins, cramps, leg fatigue, leg swelling, spider veins, skin discolorations and leg ulcers.

“In addition one in five working men and women experience leg problems,” she continues. “Many people don’t know how a simple change of socks can make their legs feel better on a daily basis. By simply asking people what they do for a living, finding out if they have to stand for long periods of time and asking if they ever have tired, achy legs, can open a window to talk to anyone about compression making it a great way to get add on sales.”

Going to SchoolBut providing compression is not an instant slam-dunk. Ensuring successful outcomes for compression patients comes down to compliance. So, from a clin-ical perspective, one of the key elements for a solid compression business lies in fostering compliance. Even after being given a prescription from a doctor, some patients will come in to get fitted and still might not wear the compres-sion product. Deeper expertise is needed on-staff to ensure the best treatment for patients.

“If you really want to grow your compression business, you need to establish relationships with local physician to help build your business,” says Judith Brannan, associate director of Education & Medical Affairs for SIGVARIS. “Getting educated about compression, disease states, and products will allow physicians to feel confident about sending their patients to you. Compliance is important to physicians because they want their patients better. You can help work with patients to find products that will be easy to incorporate into their daily lifestyle.”

A key way for key staff members to gain this knowledge is to become certi-fied compression fitters. Fitters receive training by going to different classes and seminars that are typically put on by the manufacturer of the product. The fitter will review a patient’s history and ask key questions to ensure an appro-priate fit. SIGVARIS offers such a course, according to Brannan.

“By becoming a SIGVARIS Certified Fitter, you are able to really help patients because it provides a better understanding of venous diseases, product knowledge, and how to help patients,” she says. “It allows physicians to feel confident that their patients are going to be well taken care of. The business will be come known as a place in the community that not only sell compres-sion products but one that can also work with patients. More and more physi-cians will start sending their patients. You’ll also get patient referrals from their friends.

“It can also help with knowing things like which products are best for patients with specific health concerns such as sensitive skin or diabetes, for example,” she adds.

Course DetailsSIGVARIS offers a basic and advanced fitter course, as well as online courses. The courses typically take one or two days to complete, with the basic course consuming just one day. More information can be found at bit.ly/1OKNgZe.

“We have great feedback about how surprised people are by how much they learn in just one day that can really help their patients,” Brannan says. “We have also offer webinars for continued learning from time to time.

“We plan where to hold these courses based on interest, so providers should always ask us if they don’t see one in their area,” she adds. “Our territory managers are also happy to come to a business and do some training.”

The net result of even the one-day course is having the right insights into different patient disease states and which types of compression can help.

“Participants of our course will walk away with knowledge about venous anatomy and venous disorders, how to properly measure and fit patients for compression, tips and tricks for fitting difficult patients, and understanding about compression and the different types of products available,” Brannan explains.

And those products range beyond the compression garments themselves. Because compression garments are so tight, it can be difficult for some patients with flexibility or joint issues to put them on and take them off. As a result, special devices have been developed to help patients accomplish that, and a certified fitter can help train patients on how to use them.

“Sometimes compliance is an issue and some patient’s with very limited dexterity may have trouble putting on stronger levels of compression,” Brannan explains. “SIGVARIS makes several products to make donning easily. We also construct many of our products with double covered yarns to help them glide on easier and reduce the friction against the skin. For some patients layering garments will help get them to the compression level they need.

“By attending a SIGVARIS Certified Fitter Course, those who leave the course will have a greater understanding on how to select the appropriate products for patients, when to suggest donning aids as well as tips and tricks to share with patients regarding donning and doffing,” she adds.

In terms of the number of staff that should get certified in fitting compres-sion garments, Brannan recommends a minimum of two people get the training for each provider location that will be offering compression.

“The more people who are able to assist people walking in a store the better,” she says. n

Gaining theRight Expertise

Offering compression products presents providers with a solid retail opportunity, but it’s not a slam-dunk. How can providers

get the right skills and knowledge on their team?

by David Kopf

Problem Solvers

1115hme_PSolverCompression17.indd 17 10/22/15 10:50 AM


You might have heard the expression “What gets measured, gets managed,” or maybe you have heard “What gets measured, gets done,” but no matter the variation on the theme, the meaning is clear: in order to improve your performance, you have to know how you’re doing.

This is why many providers are starting to pay much closer attention to how their businesses are performing. In an era where reimburse-ment cuts, competitive bidding, audits and other public and private payor pressures are impacting overall healthcare in the United States, providers must pay strict attention to their performance. Like cross-country runners weighing their food to the gram and tracking every step they take, providers must measure for success.

HME’s MetricsThe question is, where to start? Probably the first step into HME metrics is by defining the word. In the very basic sense, “metrics” are the measurements by which someone measures something. In the auto-motive world, key metrics might be cubic centimeter displacement, or horsepower. In the business world, key metrics might be gross margins,

What metrics are providers using to quantify their performance — and success?

By David Kopf


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or monthly revenues. In the HME world, the metrics by which a provider might measure are

a little different. In fact, they can vary from provider to provider based on factors such as the types of medical equipment a provider special-izes in, or the payors and revenue sources it might pursue.

That said, there are some commonalities worth exploring, and prob-ably the best place to start is by breaking them down into two catego-ries: business/operational metrics and care metrics. Providers need to know how their business is performing, and providers must know how the care they are offering patients is performing.

“In a typical HME business, patient care is at the top of the list,” says Jana Macon, vice president of Strategic Services for HME software company Brightree LLC. “Much attention is given to customer-facing activities and this should certainly continue. However, the HME busi-nesses that are thriving in today’s reduced reimbursement climate have learned how to measure themselves operationally and have learned to move the needle in areas of efficiency and productivity.”

“The approach I’ve taken with most of the clients is this: Focus on what you can control,” says Dan Greyn, systems sales for HME IT vendor Computers Unlimited.

“Yes, you have to be cognizant of things like reimbursement rates, but you can’t control those,” he continues. “But what can you control? What can you become efficient at? And what metrics can you put in place to improve those areas?”

On the business front, one key area providers should measure is revenue generation and cash collection effectiveness, says Kimberly Commito, director of Product Management for the Home Care Solutions Division for Mediware. Providers need to know what types of sales are driving their revenue.

“In addition, categorization of products allows reporting on key reim-bursement trends, which is also important to the health of an HME busi-ness,” Commito says. “Booking revenue and which products are selling most effectively is only one piece, the correct reimbursement and follow up required to collect cash once claims are processed with payers is also essential.”

Related to this is referral effectiveness. Providers must know what busi-ness lines are driving your sales and how effectively they are capturing referral business from the prescribers in their market, she adds.

One real area of concern is process and efficiency. Providers must focus on improving the process and execution of the most mundane tasks, according to Macon.

“An HME provider must know how many touches — how much effort is required (labor) for every major line of business,” she says. “They must work every day to decrease that cost in ways that do not forsake patient care.”

Greyn and Macon agrees that providers should take a key task and then trace every thing that happens to that order and literally every step of the workflow around that order to get a solid sense of how many touches go into its successful execution. That simple exercise is something many providers don’t do, and fail to realize big productivity gains as a result.

“There was a company that I was visiting a while back, and it’s not uncommon, but they were receiving the orders from a fax server,” he explains. “The first thing they do is they print it, then they route it, then they scan it. So looking at metrics on that is important. You can control how many touches [a process] takes. You can … get a baseline. But a lot of providers don’t have a good grasp of that.”

“I can think of the six major steps involved in any line of business: intake, documentation collection, delivery, billing confirmation, and cash collections,” Macon says. “In each of those areas there are discrete steps involved. All of those steps matter — which ones can be elimi-nated, automated, or streamlined?”

Bearing this in mind, Macon offers some examples for providers to consider:• Time on hold.• Time to collect documentation by referral source.• Time to confirmation.• Denial aging and follow up — is the provider following up as soon and

as often as possible to collect its money?Referral effectiveness is a key metric for Commito, who notes that

providers should tracking what business lines are driving a provider’s sales and how effectively it is capturing referral business from those respective prescribers in its market.

Likewise, Greyn highlights the point about tracking how well referrals supply documentation for claims. Metrics are indispensable if there is a problem, because they serve as an objective third party.

“If you have the metrics, you can go back to back to the doctor and say, ‘We’re trying to service the patient, but we’re consistently having to go back and get additional information in order to service your patient,’” he says. “Without those metrics, I can’t go back and carefully have that question.”

Another workflow worth tracking is the amount of time between the delivery occurring (provision of product or care to a patient) to billing of the product or service, to collection of the cash associated is essential, Commito advises.

“This points directly to operational efficiency and the ability to provide care, and receive payment in quickest possible way, and in order to re-invest in your business to continue growth,” she says.

Another key area to measure is inventory. For many providers, inven-tory can represent their single largest overhead item, given the expense of some types of medical equipment. Inventory management is a bottom line reality that must be tracked and fine tuned, because it can also impact patient access to the right equipment, which in turn impacts care.

“Ensuring that product is moved out of inventory effectively and expi-ration dates are managed properly, for example in the case of enteral formula, is imperative to ensuring your cost of goods is protected,” Commito explains. “Inventory management solutions should allow for appropriate serial number and lot number tracking to ensure items are moving in and out of your warehouse at the proper speed and that inven-tory is being depleted properly so as to not compromise patient care.

“The data you capture, even on a simple day-to-day basis processing orders, can tell a compelling story.”

— Kimberly Commito, Mediware

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Measuring CareAnd there are various performance metrics related to the care given to patients, that providers should monitor, as well. This could be in terms of proper setup and training, therapy compliance, or outcomes, for example. Chief among those is ensuring providers adhere to their treat-ment, according to Commito.

“Compliance tracking is essential in monitoring patient activity,” she says. “Ensuring that patients are using their products appropriately and in the correct manner supports referral activity, which again promotes business and allows for growth. Even payors are beginning to require this type of tracking to provide adequate reimbursement.

“Software platforms that you utilize should be to track the ability to follow up on a regular basis with your patients that require monitoring, and should have the ability to import patient data for compliance in utilizing equipment or gather information related to their overall care,” Commito explains.

“Outcomes monitoring is essential as well,” she adds. “Defining desired outcomes and having a mechanism to capture data points related to the associated products provided to patients, allows DME providers to tell success stories around their services. In addition, the ability to share outcomes data with others in the industry, or benchmark to gauge success is important.”

Of course, the industry is already seeing providers in the venue of sleep therapy supply physicians and other key healthcare professionals with this kind of data in order to perfect a patient’s compliance and care.

“Providers that specialize in CPAP have begun to differentiate them-selves with their referral sources by measuring their own performance,” Macon observes. “Two measurements that apply are time to service/set-up the patient and compliance with the therapy. These measure-ments are possible as CPAP machines are one of the first in the HME market to provide automated clinical feedback on usage/compliance for each patient.”

That kind of collaboration and monitoring can have a benefit beyond therapeutic benefits, because it can allow providers to differentiate among their competitors by proving their effectiveness as a partner in the care continuum.

“This is an exciting trend that will further enable HME providers to

show to their referral sources what great results they produce,” Macon says. “The providers who are succeeding in this area have established very structured training processes at set-up, and they also have follow-up protocols where ‘sleep coaches’ are speaking to the patients after day one, week one, etc.

“The visibility that this provides to the referral source, and also to the HME provider, is outstanding,” she adds. “The HME provider can understand what types of support the patient responds to, thus allowing them to convert the patient to an ongoing resupply customer.”

Don’t think that care, compliance and outcomes monitoring will be limited to sleep therapy. As healthcare as a whole focuses on costs as they relate to outcomes, further attention will be placed on these sorts of metrics for all type so care. For instance, it’s like oxygen providers will soon monitor care metrics, and probably should if they want to establish their expertise and effectiveness to referral partners.

“CPAP therapy compliance is just the first market to benefit from the application of technology to provide necessary data, so that providers can focus their investment and effort on the exceptions — serving the patients that need their help in order to produce optimal results,” Macon says. “… By sharing the compliance data (initial and ongoing), the provider can continue to bring value and be relevant to the referral source and therefore gain more patients in the future.”

“That’s definitely going to grow into other areas,” Greyn adds. “And again, it goes back to metrics as far as what the provider can capture within its system. … Ideally having a system that allows you to configure and capture information, monitor it, follow up on it, and obviously report on it, is key.”

Technology’s RoleAlready, the software and information technology that providers use offer various tools to let them track their performance (see sidebar, page 22). Various HME management and billing software packages offering reporting features to help them better understand key perfor-mance areas, and customizable executive dashboards to help manage-ment quickly summarize day-to-day business and care performance.

“Analytic tools are typically available with most software applications,” Commito says. “These not only provide good views into the metrics described above from a summary perspective, but also many times have additional reporting options to drill down into those metrics to provide granular detail in order to analyze and make adjustments to operational processes, and identify areas for improvement in gathering data more effectively to support initiatives around the areas described above.”

The key is the data input, she advises. Providers should evaluate what their software is capable of tracking and make plans to utilizing these reports.

“The data you capture, even on a simple day-to-day basis processing orders can tell a compelling story,” Commito says.

Macon adds that daily tracking and understanding basic workflows up-front will product powerful results on the back-end of the process.

The metrics that produce margin are often around the most mundane tasks,” she says. “If my technology platform can help me understand the ‘time in state or time in each step,’ it is helping me survive and thrive. A strong technology platform will allow providers to configure the optimal time for each step and will measure and display that in an automated way.”

It might sound a little over the top, but Macon says that optimally, staff members would have timers that would let them track their tasks

“By sharing the compliance data (initial and ongoing), the provider can continue to bring value and be relevant to the referral source, and therefore gain more patients in the future.”

— Jana Macon, Brightree LLC

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each step of the way. That way they can truly set baseline metrics for performance and then work on streamlining to make big gains with the help of their IT infrastructure.

“If that level of work can be identified, management teams can have visibility to how many tasks, orders or revenue associated with orders is being held up at a particular point and they can work on solving the problem,” she explains. “For example, does that particular user or group need training, tools, or more resources?

“Every business has bottlenecks to clear and problems to solve every day; however, great businesses actively looking for issues and their technology should facilitate that effort,” Macon continues. “Having the proper reporting and real-time visibility to help you manage work in the most efficient way will make or break an HME business today.”

HME Metrics and the FutureAs healthcare continues to evolve, one thing is for certain, an increasing emphasis on outcomes and costs will mean that providers absolutely must continue monitoring their businesses and their care.

“Therapy compliance and monitoring of patient success on various therapies will be key,” Commito predicts. “Insurance carriers and referral sources want to ensure that their patients are seeing success when using equipment, receiving treatment or utilizing certain products.”

This could possibly mean that partnerships could develop between the industry’s software companies and DME vendors and manufactures

in order to share therapy information more effectively. Alternately, the industry could see collaboration on the gathering of patient data from different perspectives in order to paint a picture of overall patient and therapy success, she suggests. But one thing is definitely clear: metrics will define HME’s future.

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